Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Flu Shots for the Elite

The flu shot shortage offers some food for thought for investors.

First, an interesting bit of not-so-trivial trivia. (Thanks to Alex Tabarrok of MarginalRevolution.com for these statistics.)

Annual U.S. deaths due to the flu: approx 36,000.

Annual U.S. deaths due to anthrax: approx. 1.

Spending on R&D to fight flu: $283 million.

Spending on R&D to fight anthrax and other biological agents: $5.6 billion.

Now that you're possibly thinking that the establishment has some problems with priorities when it comes to the flu, here's another disconcerting tidbit: According to a Washington Post article, "While many Americans search in vain for flu shots, members and employees of Congress are able to obtain them quickly and at no charge from the Capitol's attending physician, who has urged all 535 lawmakers to get the vaccines even if they are young and healthy."

Kind of crummy, eh? To be fair, many fewer congressional workers have been getting flu shots this year, heeding calls to leave more doses available for the elderly, sick, pregnant, or very young. Still, not everyone is inclined to do so. According to the article, "Senate Majority Leader Bill Frist (R-TN), a heart surgeon, sent letters urging his 99 colleagues to get the shots because they mingle and shake hands with so many people." (Undecided voters will possibly be pleased to hear that President Bush and Sen. John Kerry have both vowed to not get the shot.)

Flu vaccines in America are provided by only two firms licensed to do so -- Aventis Pasteur, a unit of Aventis(NYSE:AVE), and Chiron(NASDAQ:CHIR). This year some contamination was found at a Chiron plant, slashing the U.S. flu shot supply. The New York Times explained why there are only two firms involved, saying:

"In recent decades, many drug companies in the United States abandoned the manufacture of vaccines, saying that they were expensive to make, underpriced and not profitable enough. Flu vaccine can be a particular gamble, because the demand for it varies from year to year and companies throw away what they do not sell because a new vaccine must be made each year to deal with changing strains of the virus. Some companies dropped out because of lawsuits, and others because they determined that it would not pay to retool aging vaccine plants to meet regulatory standards."

As an example of how expensive flu-shot involvement can be, consider that Wyeth Pharmaceuticals(NYSE:WYE) produced flu vaccine in 2002 but was able to sell only half of its stock because of slack demand. The company thus ended up losing about $30 million as it destroyed what it could not sell.

Author

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter... Follow @SelenaMaranjian